The Ecology of a County Town

The ecosystem is about the flow of money. Where does the money initially come from—the upstream source?

Generally speaking, transfer payments determine the floor for county-level public institution employees (shiye bianzhi), while land sale revenues determine the ceiling.

There are two types of counties. The first type earns money from processing and manufacturing along a supply chain—serving a specific region, nationwide, or even global markets for a particular segment. The second type earns money from land sales or transfer payments.

For the first type of county, the upstream source of money is orders—orders from across the country and globally. When demand expands, money expands; when demand shrinks, money shrinks. Everyone who depends on this line will find it harder to make a living.

For the second type of county, only when land sells well can the county afford to fund supporting infrastructure projects. Whoever lands those projects captures the biggest share—the upstream windfall in the county's ecosystem. Besides those entrepreneurs who profit from winning contracts, there's another group that relies on scale: the county's public institution employees. A county must have its own revenue to sustain a large workforce of such employees; otherwise, it must wait for transfer payments. If land can't be sold, the county is forced to downsize its public institution staff.

They sit in the middle tier of the money flow.

The third wave of people are service providers catering to the contract winners and the public institution employees. Look at the cinemas, dining streets, KTVs, foot massage parlors, bubble tea shops, cafes, and flower and cake boutiques in county towns. All of these serve the county residents with spending power—not villagers. The small business owners running these businesses form the third group, capturing the downstream end of the money flow. Essentially, all three groups are earning money from outsiders buying houses and from transfer payments.

Is there any fundamental support for county land prices? No. Because overall, people are flowing outward toward big cities. And this siphoning effect has entered its later stage—meaning it's no longer big cities siphoning counties, but super-large cities siphoning large cities, and large cities siphoning small cities. Counties, at the bottom tier, see no population inflow. In common parlance, a county is simply a base that supplies population—specifically young people—to the outside world. A county is a supply chain for exporting人口.

When land can no longer be sold, will the entrepreneurs who previously won contracts and captured the upstream money stay in the county? Entrepreneurs are like nomads, following water and pasture. They will be the first to leave, heading to big cities in search of new opportunities.

The second group—the middle-tier public institution employees—were hired during the earlier boom years when land sale revenues were plentiful. They won't be laid off immediately, because arbitrary dismissals aren't permitted. That's what makes their jobs iron rice bowls. This group will still sustain consumption in the county for now.

The third group—small shop owners in food and entertainment—will simply find business getting tougher, but they won't leave. Because even though it's hard, it's still doable. If you run off to a big city, you'd have even less idea of how to survive.

This is the current commercial landscape and ecosystem of county towns.

The quality of a product has no universal standard. Who decides? The soil decides, the environment decides, the ecosystem decides, the demands decide. If you actually spend time in a county town, you'll eventually understand why everyone eats at a particular restaurant.

Additionally, whenever exams are required, knowledge and skills cannot be effectively passed down over generations.